New Mountain Capital to Plan $1 Billion Fund for Minority Stakes

(Bloomberg) -- Private equity firm New Mountain Capital is continuing its diversification push with a new fund dedicated to minority investments, according to people with knowledge of the matter.

The company has begun talks with investors about raising $1 billion for the new pool of capital, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The fund will take minority stakes in small and midsize closely held companies based in the U.S., the people said.

A spokesman for New-York-based New Mountain declined to comment.

The move is the latest by the company, which was founded in 1999 by Chief Executive Officer Steven Klinsky, to move beyond traditional leveraged buyouts. The firm began investing in credit in 2010 and hired Teddy Kaplan from Angelo Gordon & Co in 2016 to run net lease real estate investing, according to the company’s website.

New Mountain, which owns stakes in Avantor Performance Materials Holdings SA and Diversified Foodservice Supply Inc., raised $6.2 billion for its main buyout fund in 2017. New Mountain was in talks last year to sell a minority stake in its management company to a unit of Blackstone Group LP, people familiar with the matter said at the time.

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